Filed under: International markets, Google (GOOG), Marketing and advertising, News Corp’B’ (NWS)
News Corp. (NYSE: NWS) has not had its fill of the revenue failure of MySpace in the U.S., so it wants to try to address that problem overseas.
According to The Wall Street Journal, “Every single market we’re going [into], we’re seeing significant growth in revenues across the board,” stated Travis Katz, senior vice president in charge of MySpace’s international business.
Maybe the MySpace model of trying to sell advertising to marketers who want to reach social network users who have no interest in looking at ads won’t be such a failure outside the U.S.
MySpace might actually be doing worse, but in late 2006, Google (NASDAQ: GOOG) signed at three-year deal making it the exclusive search engine for the social network and guaranteeing News Corp. $900 million in shared ad revenue. Without that, it is safe to state that MySpace’s revenue would be quite a bit lower.
The economic argument for making money on social networks posits that the tens of millions of people who go to MySpace and rival Facebook are good targets for marketing messages. It appears that this is not true. Trying to arrange social network consumers based on interests is nearly impossible because they often disclose little about their activities or habits.
Getting more users outside the US won’t help MySpace. It will go further in proving that marketers are superior off sticking to vertical sites and portals where at least the content interests of users is known.
Douglas A. McIntyre is an editor at 247wallst.com.
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